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posted by martyb on Monday July 06 2015, @08:57AM   Printer-friendly
from the getting-what-you-asked-for-may-not-be-getting-what-you-want dept.

The Greeks voted no to the European Union's terms, despite warnings from the EU that rejecting new austerity terms would set their country on a path out of the Eurozone. 62% voted "No" while 38% voted "Yes".

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  • (Score: 3, Informative) by jalopezp on Monday July 06 2015, @03:43PM

    by jalopezp (2996) on Monday July 06 2015, @03:43PM (#205672)

    Is this comment from 2010? American banks were bailed out in 2008, and Greece doesn't owe any money to any banks. Greece did owe money to banks five years ago, when it first risked default. It was since bailed out twice and was able to pay the banks back. So now, instead of owing money to the German (and French) banks, Greece owes money to the IMF, the ECB and the European Comission. That bailout came with very severe conditions that were meant to allow Greece to pay back their debt in a timely manner, but these conditions turned out to be so draconian that the Greek GDP has shrank by 20%, which ironically means that Greece definitely cannot pay those loans back.

    So now that you're caught up on the events and we can agree that corporations are not playing anymore, we can talk about a Greek default. Loaning money is a risky proposition, and sometimes it is so risky that no one is willing to do it. In a high risk environment increasing the interest rate can balance out the risk of default, but if the interest rate goes high enough that itself makes it less likely that the debt will be paid. This is the position Greece is in, and it still needs to borrow more money to pay pensioners and public workers. In this situation, governments have a 'Lender of Last Resort', the IMF, who is willing to lend you money despite the risk, and to do so, gets extraordinary powers to collect. What it means here is that you cannot default to the IMF, if you could, the IMF would never get its money back from anyone. America, who provides most of the IMF funds, and the rest of Europe will make sure that the IMF gets paid even in case of default, even if it takes 100 years.

    So no, banks won't be bailed out, those guys cut their losses years ago. But yes, the IMF will be paid, and definitely with tax money because there is no other way.

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  • (Score: 2) by Kromagv0 on Monday July 06 2015, @06:29PM

    by Kromagv0 (1825) on Monday July 06 2015, @06:29PM (#205776) Homepage

    Well it looks like they still do owe some private banks money [](see the graphic at the end of the article) but the bulk is to national banks, the ECB, and IMF. Also it looks like things are going to get real bad quick since the ECB isn't providing any more emergency loans to Greek banks [] so those banks are going to likely run out of money shortly as people pull money out.

    T-Shirts and bumper stickers [] to offend someone